PANAMA Law and Practice Contributed by: María de Lourdes Marengo and Joaquín De Obarrio, Patton Moreno & Asvat
2.3.4 Registration of Leases With the Domestic Aircraft Registry Leases must be recorded with the Aircraft Section of the Movable Assets Section of the Public Regis - try Office and filed with the Aeronautical Registry of the AAC to obtain the certificate of registration of the aircraft. Registration of the lease at the Aircraft Section of the Public Registry Office is for notice to third parties and is a prerequisite for the issuance by the AAC of the certificate of registration of the aircraft. The execution and delivery of an aircraft’s and/or an engine’s lease are not subject to any consent from any government entity. 2.3.5 Requirements for a Lease to Be Valid and Registrable There is no specific form for the lease but it must include the names and details of the parties, a full description of the aircraft, the duration, the amount of the rent and the terms agreed by the parties. The lease may be executed in any language. If executed in a foreign language, an official translation into Spanish by an official translator in Panama is required for reg - istration purposes. The lease must be protocolised in a notarial deed and recorded with the Public Registry Office. If the lease is executed outside Panama, the signature of the parties must be certified by a notary public and the signature of the notary public must be legalised according to the 1961 Hague Convention on the Apostille. Registration at the Public Registry Office is required for notice to third parties and is a prerequisite for issuance of the certificate of registra - tion by the AAC showing the lessor as owner and the lessee as operator. 2.3.6 Taxes/Duties Payable for Registering a Lease Registration of the lease with the Public Registry Office is subject to payment of notarial fees, stamp tax and Public Registry Office registration fees based on the amount of the rent and the duration of the lease.
2.3.7 Registration of Aircraft in Alternative Countries The United States of America and Colombia are the most popular jurisdictions in which to register aircraft that are habitually based in the Republic of Panama. 2.3.8 Requirements for Documents Concerning Registration All documents to be recorded with the Public Regis - try Office and the AAC must be original or a certified copy. Documents in a foreign language must be trans - lated into Spanish by an official translator in Panama. Documents executed outside Panama must be certi - fied by notary public and the signature of the notary public must be legalised according to the 1961 Hague Convention on the Apostille. 2.4 Lessor’s Liabilities 2.4.1 Tax Requirements for a Foreign Lessor Payments of rent to a foreign lessor are subject to payment of income tax by way of withholding by the lessee unless an exception is granted through a tax treaty. The lessor is severally liable for such tax and would be responsible for payment in the event that the lessee fails to make the withholding. 2.4.2 Effects of Leasing on the Residence of a Foreign Lessor Foreign lessors are not deemed to be resident, domi - ciled or carrying on business in Panama as a result of being a party to, or enforcing, a lease on an aircraft registered in Panama. 2.4.3 Engine Maintenance and Operations Liability in respect of the aircraft and engine mainte - nance and operations is generally imposed on the les - see unless otherwise agreed in the lease agreement. 2.4.4 Damage or Loss Caused by an Asset The owner or lessor under a lease, or a financier financing the asset on lease, is not liable under the doctrine of strict liability or any other similar domes - tic doctrine as a result of damage or loss caused by the assets unless there is gross negligence or wilful misconduct on the part of such owner or lessor or financier.
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